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$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Squamish Equipment
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Selected financial information
$\begin{array}{c}\begin{array}{lll}\hline \text { Expected net income after tax next year before new financing }\\ \text { Sinking-fund payments due next year on existing debt}\\ \text { Interest due next year on existing debt}\\ \text { Company tax rate}\\ \text { Common stock price, per share}\\ \text { Common shares outstanding}\\\hline\end{array}\begin{array}{r}\hline\$ 40 \text { million } \\\$ 14 \text { million } \\\$ 15 \text { million } \\36 \% \\\$ 20.00 \\18 \text { million } \\\hline\end{array}\end{array}$

-Please refer to the financial information for Squamish Equipment above.Calculate Squamish's times-interest-earned ratio for next year assuming the firm raises $40 million of new debt at an interest rate of 7 percent.

A) 2.00
B) 3.09
C) 3.66
D) 4.35
E) None of the above